Abnormalities in smooth pursuit eye movements and deficits in auditory sensory gating are two of the best characterized physiological endophenotypes associated with schizophrenia. Transient normalization of both of these sensory deficits by smoking, in addition to evidence from epidemiology, animal models, genetics, molecular biology and post-mortem binding studies, suggests involvement of nicotinic cholinergic receptors in the disease. The functional effect of this putative cholinergic dysfunction on mental processes in individuals with schizophrenia, however, remains unknown. This first aim of this study proposes the use of functional magnetic resonance imaging (fMRl) to characterize the functional neuroanatomy associated with smooth pursuit eye movements in patients with schizophrenia and age-matched healthy controls to determine if failure to properly execute this task in patients with schizophrenia is associated with a detectable, abnormal pattern of neuronal activation. The second aim of his study is to use fMRI to detect differences in functional neuroanatomy between control and patients with schizophrenia are due to nicotinic cholinergic receptor dysfunction by examining task-specific (smooth pursuit eye movement) changes in neuronal activity associated with administration of nicotine to controls and patients with schizophrenia.